Frank Coles savages shipping institutions holding back tech change

The shipping industry must undergo a wholesale cultural shift to manage the disruption that is coming or the promise of all the emerging technology that has been capturing recent headlines will never be realised.

That was the keynote message of Transas’s provocative chief executive Frank Coles yesterday at the company’s annual global conference held this year in Vancouver.

Coles described the industry as having been have “block-chained”, with tales of autonomous ships around every corner and doomsday scenarios of failed cybersecurity, which were only serving to “line the pockets of lawyers, consultants or anyone with a software package to sell”.

“Yet most of them forget the fundamental issue: the human factor,” said Coles. “Until we change the attitudes to the business and the current maritime culture, technology will remain just a patch, not a solution.”

Coles painted a picture of a shipping industry that was culturally divided into two parts: ‘logistics’ and ‘maritime’. The former is a place where powerful shippers and disruptive start-ups were grasping a technology-led revolution with both hands, while the latter lacked direction as it’s proponents limped begrudgingly towards the future.

Maritime operations and infrastructure thinking seems to change at a snail’s pace, Coles said. “We seem to be content to have old-fashioned ships and an old-fashioned business infrastructure sitting alongside modern logistics,” the Transas boss claimed.

“In maritime, change mainly seems come from the engine manufacturers and the use of alternative fuels and more efficient engines,” Coles said. “That progress is important for the preservation of our oceans and should be applauded. But many other issues have stalled while talks roll on with the regulators and other background influences. We simply have not done enough.”

Coles is known in the industry as an agitator for change. But, even by his standards, yesterday’s withering attack on shipping’s historic institutions would have put more that few noses out of joint. He challenged delegates to imagine an industry where consolidation had cut the operational fat, or “the industry’s historic middlemen”, in the supply chain.

He implored the audience to imagine a world without brokers, agents, maybe even without class and with fewer equipment and service suppliers. “A world with standardised solutions … where countries and regions innovate and drive quality, overtaking the bureaucracy and regulators who drag their heels unable to keep up,” Coles mused.

For him, it is a world in which the IMO no longer holds the global mandate for policing safety, replaced instead by the nation states through whose waters ships pass. But, perhaps more importantly, the shipping ‘world’ would become an industry that no longer struggles to attract the talent it needs to drive innovation.

“This is the maritime world of a green, safe and efficient means of transporting goods,” he said.

“Where we have reduced the human-element risks, provided a greener ship and operations that are fit for purpose. Most importantly, this is an environment where the younger generation will actually want to carve out a career in the maritime industry.”

Coles wondered why today’s companies freely spend large amounts of money on blockchain and cyber security for their logistics operations, while at the same time adopting an “auction mindset” for maritime-related operations, “a lowest-cost, fragmented-purchase model that is sure to result in a weak cyber structure”.

And he saved his strongest criticism for the regulators, who he accused of “failing to drive home a standardised solution for a safer, efficient and greener ships”.

“We have reached a frankly ridiculous point. Where a lobby of suppliers, owners and thinktanks is creating a bureaucrat’s solution in committee, and take years to come to any conclusion. This is not going to work in the new world. We cannot keep designing a donkey when we are looking for a racehorse,” Coles maintained.

Attitude, he said, lies at the heart of shipping’s inability to change.

He accused class and the flag states of bending to shipowners and unions in ways that compromise safety. Both class and P&I Clubs find themselves balancing safety against revenue, Coles claimed.

“They know that enforcing or supporting the right decision could lose them clients,” Coles said. “How can it make sense in our modern world to allow human life or our precious environment to be weighed on a scale of risk and be treated as a statistical probability?”

Coles called for shipping to move towards an ecosystem in maritime safety and operations not unlike that of aviation, where jurisdiction for elements such as cargo and port operations is separated from the safety of navigation.

And in one of many new acronyms that littered yesterday’s speech, he said it was time to create an industry ecosystem of fleet operations resource management (FORM).

“Maritime needs an integrated operations ecosystem for the safe navigation of tomorrow’s ships. We need a professional FORM, with a quality traffic control and monitoring service,” Coles said. “We also need to factor into this the human element at a level where it is properly trained, properly equipped and structured in a modern way to fit the model.

If not, he said, the maritime industry will slip further away from the realities of the modern world, the needs of the next generation and the demands of the new shippers.